Nicholson, a former Republican National Committee chairman and a Vietnam veteran, was picked by President Bush to head the Veterans Affairs Department in 2005. Planning to return to the private sector, he said his resignation is to take effect no later than Oct. 1.

Nicholson, 69, is the latest in a line of senior officials heading for the exits in the final 11/2 years of the Bush administration.

"It has been an honor and privilege to lead the VA during this historic time for our men and women who have worn the uniform," Nicholson said in a statement. "We have accomplished so much, and the VA is always striving to improve our services to veterans."

His resignation comes amid intense political and public scrutiny of the Pentagon and VA following reports of shoddy outpatient care of injured troops and veterans at Walter Reed Army Medical Center and elsewhere.

It also ends a beleaguered two-year tenure in which Nicholson repeatedly fought off calls for his resignation over the VA's unexpected $1.3 billion shortfall in 2005 that put health care at risk; last summer's theft of 26.5 million veterans' personal data in what was the government's largest security breach; and, more recently, the award of $3.8 million in bonuses to senior officials who were responsible for the agency's budget problems.

Walter Reed is a Pentagon-run facility, but charges of poor treatment relating to poor coordination quickly extended to the VA's vast network of 1,400 hospitals and clinics. The VA also has a severe backlog of disability payments to injured veterans, with overwhelming delays of 177 days that Nicholson has called unacceptable.

"Secretary Nicholson's resignation should be welcome news for all veterans," said Paul Rieckhoff, executive director of Iraq and Afghanistan Veterans of America. "The VA under Secretary Nicholson has been woefully unprepared for the influx of Iraq and Afghanistan veterans, consistently underestimating the number of new veterans who would seek care, and failing to spend the money Congress allotted to treat mental health issues."